Lawsuit that claims Apple and Amazon elbowed out resellers will proceed
A U.S. district judge has ruled that Apple and Amazon must face a class-action lawsuit that alleges the companies worked together to artificially inflate the price of iPhones and iPads sold on Amazon.
Buy iPhone at retail price from Amazon
The lawsuit, initially filed in November, accuses Apple of conspiring with Amazon to eliminate 98% of Apple product resellers to the benefit of Apple and Amazon.
According to Reuters U.S. District Judge John Coughenour has rejected Apple and Amazon's request to throw out the lawsuit.
Prior to an agreement made between Apple and Amazon in 2018, Apple products were only available via third-party marketplaces. The prices were sometimes lower than retail, but the devices were not always in perfect condition.
By 2019, the number of Apple resellers took a nosedive, reportedly by design. Apple's new agreement now limits the sale of their products to authorized resellers or those who purchase $2.5 million worth of refurbished inventory every 90 days. This is a significant change from their previous policy.
The lawsuit says that the number of Apple retailers on Amazon fell by 98%, from nearly 600 resellers to 7.
According to the lawsuit, Amazon gained an advantage from selling products at prices that were 20% higher than what they would have been otherwise.
Apple's large size makes it a frequent target of class action lawsuits and patent claims. These legal battles can drag on for years, and even if they are won, parties in the class receive only a small fraction of the settlement while the attorneys earn millions.
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Comments
"The prices were sometimes lower than retail, but the devices were not always in perfect condition."
" Apple's new agreement now limits the sale of their products to authorized resellers or those who purchase $2.5 million worth of refurbished inventory every 90 days."
Just reading the ArsTechnica article: https://arstechnica.com/tech-policy/2023/06/judge-allows-apple-and-amazon-price-fixing-lawsuit-to-move-forward/
"The original complaint, filed by Seattle law firm Hagens Berman on behalf of Pennsylvania resident Steven Floyd and a wider class, suggests that Apple and Amazon's agreement, originally framed as a way of removing counterfeit or low-quality Apple products from the store, denies customers competitive pricing on iPhones and iPads. The suit claimed that the agreement essentially killed the market for refurbished Apple goods on Amazon while giving Amazon a discount of up to 10 percent on its own sales of Apple goods. The suit notably claimed that there were more than 600 vendors of Apple goods on Amazon in early 2018 but only seven by mid-2019."
https://www.reuters.com/legal/apple-amazon-must-face-consumer-lawsuit-over-iphone-ipad-prices-us-judge-2023-06-09/
The complaint is over Apple and Amazon agreeing to limit the number of resellers of Apple products through Amazon. This is anticompetitive and therefore illegal. The claim that it was meant to limit the number of resellers of bogus products is what is being examined.
The lawsuit (this one anyway) is claiming that consumers that purchased new iPhones and iPads on Amazon, paid a higher price than otherwise, if Apple and Amazon had not conspired to reduce the number of resellers (and thus competition). Amazon reducing the number of resellers (of Apple products) is not "anti-completive", if it can not be proven that their reduction kept the price of new iPhones and iPads higher that otherwise.
The thing one have to remember is the vast majority of resellers that got eliminated because of the higher requirements Amazon placed on them to qualify as an Apple reseller, were not selling new iPhones and iPads. They were selling refurbished Apple products. This lawsuit would have to prove that because there were less resellers on Amazon that were selling used Apple iPhones and iPads, consumers shopping on Amazon were forced pay a higher price for the new ones. In other words, Amazon did not have to discount their new iPhones and iPads as much, because there was less competition from resellers selling refurbished iPhones and iPads, on Amazon. The plaintiffs for this class action lawsuit are consumers that bought new iPhones and iPads from Amazon (after the Amazon/Apple agreement), not the resellers that were eliminated from selling refurbished Apple products.
Here's a much clearer article, that don't leave out some of the important aspects pertaining to this suit.
https://arstechnica.com/tech-policy/2023/06/judge-allows-apple-and-amazon-price-fixing-lawsuit-to-move-forward/
Take note from this article .....
>.... (Judge) Coughenour wrote, and the fact that the plaintiffs agree that not all resellers of Apple products were removed from Amazon's marketplace, a "per se" finding of antitrust violation could not be sustained.<